Maryland is a lien theory state, meaning a borrower’s property is used as security for their loan. Titles in the state can be secured by either a mortgage or a deed of trust (trust deed), both serving the same purpose and having the same basic terms.

When a homeowner defaults on their loan, the property may be foreclosed upon. There are two types of foreclosures allowed In Maryland, which include judicial foreclosures and non-judicial foreclosures.

Although the state does not have a specific right of redemption statute, if a judge determines a property to be in default, they will allow the borrower a reasonable period of time to satisfy the debt before ordering the property be sold at auction.

Types of Foreclosures Allowed in Maryland

Judicial Foreclosure

Foreclosure laws in Maryland allow for judicial foreclosures on defaulted property. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause nor assent to a judicial decree of foreclosure may be present in the loan documents.

The process is initiated with the lender filing a lawsuit against the borrower to obtain a decree of sale from a court with jurisdiction in the county where the defaulted property is located. The court will determine if the property is in fact in default and if so, will either order the debt to be satisfied, along with interest and other costs, within a reasonable period of time or if the debt cannot be satisfied, the court will order the property to be sold at auction.

Assent to a Decree of Foreclosure

In the event that an assent to a decree of foreclosure in contained in the loan documents, the borrower has given their assent to entry of a decree of sale if the property defaults. The lender must file a lawsuit against the borrower in order to foreclose, but a court hearing is not necessary to sell the property.

Non-Judicial Foreclosure

Maryland also allows for non-judicial foreclosures, also known as foreclosures by power of sale. In order for non-judicial foreclosures in Maryland to be possible, the loan documents must contain a power of sale clause, which authorizes the lender to sell the property in the event of default.
Non-judicial foreclosures allow for the property to be sold without court supervision, but in Maryland, a lender must still file an order to the court before foreclosure proceedings can commence.

Steps to Foreclosure in Maryland

All foreclosures have certain steps that must be carried out, which include the following:

1. A notice of sale must be published in a local newspaper where the property is located every week for three (3) consecutive weeks before the sale. The first publication must be printed between one (1) week and fifteen (15) days before the sale.

2. The notice must also be served to the borrower via registered and certified mail between ten (10) to thirty (30) days before the sale.

3. The sale must take place either outside the courthouse in the county where the property is located, at the property or at a location advertised in the notice of sale.

4. Thirty (30) days after the sale, the person in charge of conducting the sale (i.e trustee or sheriff) must file a report of the sale with the clerk of court in the county where the property is located. The clerk will then issue a notice that the sale will be approved unless a reason to invalidate the sale is brought forward.

5. Lenders have a right to seek a deficiency judgment in the event that the property is sold for less than what was owed. The borrower will be responsible for paying the remaining balance. If a lender wishes to file for a deficiency judgment, they must do so within three (3) years.

If you have received a notice of default, your property is in danger of being repossessed. However, there are ways to make sure you don’t lose your home. Contact a leading foreclosure attorney in Maryland right away to stop your property from being seized.

Foreclosure lawyers work hard to make sure you don’t lose your home. They will come up with alternative plans to present to your lender, such as mortgage modification or refinancing, in lieu of foreclosure. You can rest easy knowing that your foreclosure attorney will do whatever it takes to ensure that your case runs quickly and ends in your favor.

Contact a team of foreclosure lawyers in Maryland today to fight for your rights as a homeowner and stop foreclosure on your property.